Treasury Department Report Calls for Limited Use of SIFI Designations

Responding to a Presidential Memorandum calling for a review of the process for designating nonbank financial companies as systemically important financial institutions (SIFIs), the Treasury Department has issued a report recommending:

• That the Financial Stability Oversight Council (FSOC) focus on activities-based responses to financial stability concerns rather than entity-focused SIFI designations.
• That the FSOC apply a much more rigorous approach to determining whether a company presents a threat to financial stability that warrants a SIFI designation.

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